Some cryptocurrencies run on masternodes, and many articles refer to creating a masternode as “passive mining” and “passive income.” What is a masternode, and how to earn with it? How to choose the best ones?
Masternode Generates Income
Creating and earning income from a masternode is as follows:
- First, according to a number of criteria, a cryptocurrency is selected for investment. To host a masternode, use a dedicated computer with a static I.P. address as a standalone server or a local computer with a VPS server. After that, special software is installed, including a “thick wallet” — there is a complete synchronization with the cryptocurrency blockchain.
- Next, set up the wallet and deposit coins of this cryptocurrency into it. Each crypt has its strictly established number of crypto coins. The money deposited into the wallet is a deposit that remains locked for the duration of the masternode. If you withdraw some of the money, it will stop working.
- Another prerequisite is that for a masternode to be considered active and generate income, it must be constantly connected to the network (online 24/7).
Some time after the creation, the masternode begins to work and generate income — a reward in cryptocurrency coins.
How to Choose a Masternode to Buy
The launch of just one node of the top cryptocurrency will bring the investor income. However, thousands of digital coins need to be purchased to create a masternode. This business is available mainly to those who already have big capital. Retail investors can buy stakes in masternodes on special services or pools.
When choosing an asset, it is worth considering several characteristics:
- The date the coin was created. The long term of the project indicates its sustainability and demand in the market. Investments in digital currencies created less than a year ago are riskier. At the same time, they provide the opportunity to obtain the highest profit.
- Capitalization. The price of all coins in circulation grows in proportion to the increase in the rate and popularity of the asset.
- R.O.I. The return on investment ratio allows you to determine their payback period and profitability.
- The dynamics of the cryptocurrency exchange rate. The profitability of a node directly depends on the growth or fall in the price of a digital coin.
Masternodes: A List of the Best Cryptocurrencies to Invest in
The best crypto nodes to invest in 2022 are the following:
- Dash (DASH). Undoubtedly, this cryptocurrency will fall into any recommended list. Despite a strong drop due to hype in 2020, the project is applicable in the real world and has excellent prospects.
- Horizen (ZEN). The platform developers have created an interoperable blockchain with side chains that allow the network to scale and make it productive. Such well-known projects use the Horizen blockchain as Celsius, Dragonchain, and IOTA.
- Sapphire (SAPP). It is a platform with an exotic name and high profitability. Although the project got off to a bad start, the cryptocurrency rate collapsed after the listing. Now it continues to grow.
- Energy (NRG). A project with a futuristic twist that aims to develop the energy industry. As smart cities develop, any user will be able to share excess energy, receiving rewards in N.R.G. coins, and masternodes will ensure the ecosystem’s security.
- PIVX. It is a platform with three-tier masternodes.
Someone swap Bitcoin to X.M.R. and get money from it. Someone is involved in traditional mining. Someone earns on masternodes. All of these ways are nice and promise big profits.